It is a good time to look at the plastic we rely upon as we move towards the festive season that will be slashing our budgets.
You can improve your credit score and clear debt faster with the best credit cards. They also allow you to spread out high-priced purchases, earn cashback or airline points, as well as help you increase your net worth.
If you choose the wrong one or don’t manage it properly, then you could end up with a large bill and an unsatisfactory credit rating.
The right credit card will make a significant difference in your budgeting ability and spending power. To avoid any charges, make sure you pay your monthly bill.
You could get cashback on everyday expenses, points towards your next flight or interest-free balance transfers that will help you clear out debts. A credit card with the right features can be transformative.
Money has researched the market to identify the top credit card offers that can help you maximize your cash.
Because they are unique, we chose these cards.
Although they might not offer the best rate or have the longest special offers, independent research has proven that they provide a solid deal.
The best for cashback
Kreditkarte:American Express Platinum Cashback Everyday Credit Card
Perks: There is no monthly or annual charge on this card.
It gives 5 per cent cashback on all spending for the first three months of card membership, up to a maximum of £100.
Each year thereafter, you’ll receive 0.5 per cent cashback when spending up to £10,000 and 1 per cent cash back on everything you spend after that.
As long as you spend a minimum of £3,000 in each given year, every full £1 you spend on purchases qualifies for cashback.
Warning: If you fail to pay it off each month you’ll be hit with a 24.5 per cent APR.
Amex charges around 3 Percent per transaction to some UK retail outlets.
Knowing where your American Express card can be used is vital. Find out which places accept Amex.
Although it is not accepted in major stores, you will find that smaller outlets across the UK are more inclined to accept it.
Nevertheless, Amex is still not accepted by some prominent organisations like Tile Giant and Dunelm.
The American Express Platinum cashback everyday credit card currently offers 5% cashback on any purchases for the first three months of card membership, up to a limit of £100
Kreditkarte:American Express Platinum cashback credit cards
Perks: Another offering from American Express, this card pays 0.75 per cent cashback on spending up to £10,000 and 1.25 per cent for everything over that amount in a given year.
Like the ‘everyday’ card detailed above, it offers 5 per cent cashback for the first three months – but with a higher limit of £125.
Warning: This card comes with a £25 annual charge.
If you fail to pay it off each month you’ll be hit with a 29.8 per cent APR.
Amex, like we mentioned earlier isn’t accepted by all stores.
Verdict:Amex’s free Cashback Everyday Credit Card is a good option if you aren’t a frequent spender or don’t want to pay any annual fees.
However, for those who expect to spend in excess of £10,000, the fee-paying option will ultimately prove more lucrative – particularly if you take full advantage of the introductory three month offer.
For frequent flyers, this is the best option
The airlines that you use will determine which rewards cards to choose. A combination of frequent flyer points and credit cards will give you the most discounts.
Kreditkarte: British Airways American Express Premium Plus Card
Perks: The major crowd pleaser on this card is a free companion ticket on one flight booked with your Avios points. Card holders are eligible for this if they spend more than £10,000 a year.
You can now get 2 Avios points per seat, although the cost of taxes, fees and charges for each seat is still your responsibility.
Sky-high Rewards: Earn Avios points by flying with British Airways, Aer Lingus, or Iberia. You can also boost your Avios points using the BA Amex card
You also get great sign-up bonuses. At the moment you get 25,000 Avios points when you successfully apply and spend £3,000 within the first three months.
Cardholders can get automatic enrolment to the British Airways Executive Club, which includes priority on standby waiting lists, 24/7 support when traveling outside the UK through Global Assist, and travel accident insurance of up to £75,000 on public transport when booked with their Amex card.
You get 1.5 Avios points for each £1 you spend and you also get three Avios points for every £1 you spend with British Airways or BA holidays.
For a return flight between London and Berlin, it is recommended that you have a minimum of 9,000 points.
You can fly as far as Barcelona with 15,000 points, or as far back as Athens with 20,000 points.
Warning: It’s worth bearing in mind the number of Avios required jumps around depending on peak and off peak dates, the airline you fly with and how much cash you want to put towards it.
More importantly however, this card comes with a hefty £250 annual fee.
You must pay your monthly installments or face a staggering 101 percent APR.
Verdict:The card’s most attractive deal is for those who are frequent travelers and big spenders.
There is an alternative to paying an annual fee with the British Airways American Express card.
The sign-up perk for this card is a 5,000 BA Avios point bonus, which you get after a £1,000 spend in the first six months.
Virgin Atlantic Reward+ Credit Card may suit frequent Virgin Atlantic Flyers.
For overseas purchases, best
Kreditkarte:Halifax Clarity credit cards
Perks: This card has no extra charges for spending abroad, and does not charge for withdrawing cash anywhere in the world.
The Mastercard also offers better conversion rates, while Section 75 protects overseas transactions. This means the card provider protects purchases over £100 free of charge.
You won’t be charged extra for international purchases with a specialist credit card.
Also, there is no annual fee. This means that you will not be charged any additional fees as long as your monthly balance remains in good standing.
Warning: While there is no fee, interest is charged immediately at the card’s standard rate of 19.9 per cent on cash withdrawals and spending abroad. The best way to minimize the expense is to repay in full within 48 hours.
You may receive a lower interest rate depending on your credit rating when you withdraw cash. It is important to repay this amount in order to avoid paying daily fees.
You will be charged £12 if you pay your balance late, have a payment returned or go over your limit.
Kreditkarte: Barclaycard Rewards
Perks: There is no annual charge and no fees when using the card abroad, and you’ll be able to withdraw cash from an ATM without any charges.
This card offers 0.25 Percent cashback for your daily spending.
Your dream holiday is possible with a specialist credit card for travel.
With your Barclaycard, you can get Apple Music, Apple TV+ or Apple News+ for up to 5 months free. However, this subscription will continue as a monthly payment after the trial.
Warning:You must pay the full amount each month, or else you will be charged 22.9 AP.
The Visa card is not available for use on Amazon UK.
Ideal for balance transfers
Kreditkarte:Santander’s Balance Transfer Credit Card for Everyday and Long-Term Balances
Perks:This card has the longest balance transfer credit card interest-free period – 31 months.
Warning: There is a 2.75 per cent charge when transferring debt your debt over.
The APR will rise to 20.9 percentage after the 31-month period of interest-free.
Kreditkarte:Sainsbury’s Bank Balance Transfer Credit Card 30 Months
Perks:For balance transfers of up to 30%, you can get a zero per cent interest
You can also collect 500 bonus Nectar points each time you spend £35 or more on Sainsbury’s shopping with your credit card, up to ten times in your first 2 months. That’s a total of 5,000 points.
One Nectar point is worth 0.5p, so this could potentially be worth £25.
This card does not require an annual fee.
Warning: Sainsbury’s may offer you a 0 per cent interest period of 24 months depending on your individual circumstances.
Transfers made on application will be subject to a Balance Transfer fee at 1.5% Your current offer will determine the amount of this charge.
The APR increases to 20.9 percent after the period of 0%.
Kreditkarte:Sainsbury’s Bank 21 Month Balance transfer credit card
Perks: Another card from Sainsbury’s, this one offers a 0 per cent balance transfer period of 21 months and there is no fee for transferring. The annual fee is also not applicable.
Warning: Sainsbury’s may offer you a 0 per cent interest period of 17 or 13 months instead of 21, depending on your individual circumstances.
Balance transfers within the first 3 month are free of charge. This charge is based on the current offer.
The APR increases to 20.9 percent after the period of 0%.
Verdict: Santander’s card will be perfect for borrowers looking to pay off debts by transferring their entire debt over to a new card, with the promise of 0 per cent interest for a fixed period of time.
However, for those who don’t require such a long period of time it might be sensible to opt for Sainsbury’s 21 month balance transfer deal and avoid a charge on transfers.
Supermarket rewards cards: The best
Membership to a store card Tesco Clubcard Plus
Perks: This card offers five points for every £4 spent in store, as well as giving you 10 per cent off your Tesco groceries twice a month.
You also get 10 per cent off on selected Tesco clothing and homeware brands including F&F, Fred & Flo, Go Cook, Tesco Pet, Carousel and Fox & Ivy.
M&S Club Rewards is exclusively available to M&S Credit Cardholders.
It’s also worth noting that Tesco Clubcard customers benefit from an array of discounted prices when grocery shopping.
With this card you can expect to see an annual reward benefit of £225 a year for every £300 spent monthly, according to number crunching by MoneyComms.
Warning: It comes with a £7.99 monthly fee which will eat into your annual gain.
Membership to a store card M&S Club Rewards
Perks: This card from Marks & Spencer provides a host of benefits including unlimited next day delivery for M&S online purchases, additional reward points on M&S shopping and overseas spending, and a plethora of vouchers.
The annual benefits for an M&S credit card customer with Club Rewards membership can total up to £273 if you spend £300 in-store each month, according to MoneyComms.
Watch out: The £10 monthly charge will eat into your annual gain.
This is also exclusively available to M&S credit card holders.
Amazon Shoppers: The Best
Kreditkarte: Amazon Platinum Mastercard
Perks: This card from the online retail giant has no annual charge.
It offers £10 gift cards for every 1,000 points earned, as well as a £40 gift card up front.
To build up their points tally, Prime members get 3 points for every £2 spent on Amazon’s website, whilst non-Prime members get 1.5 points for every £2 spent.
This means an Amazon Prime customer using this card on the Amazon website will need to spend a total of £667 to receive a £10 gift card.
Whether you are a Prime member or not, you will also get half a point for every £2 worth of spending elsewhere.
Warning:For the first 3 months, there is no interest on this card. After the initial three-month period, there is no interest. If you fail to repay it in full every month, then you will be charged a 21.9 percentage rate.
Verdict: For those who regularly shop on Amazon this could be a great choice.
But equally, those who frequently shop at their local Tesco or M&S could stand to benefit via both their lucrative reward cards.
Overall, the best rewards card
Kreditkarte:American Express Gold Preferred Rewards Credit Card
Perks: This credit card offers members 20,000 bonus points when they spend £3,000 in their first three months – which is enough for a £100 gift card from Amazon. It can be used to convert Avios points for frequent flyers.
You can redeem points for flights with credit cards.
You also earn one Membership Reward point for every £1 you spend, and two points for any airline or foreign currency purchase.
There is also the added benefit of getting £5 back twice every month by spending on Deliveroo.
You can also enjoy two free lounge visits annually at more than 1,200 airport lounges around the world.
Warning: It comes with a £140 annual fee after the first year. If you cancel your card before the end of your first year, however, this card will be available to you for no additional cost.
You’ll get a whopping 59% APR if you don’t pay the balance each month.
Verdict: If you make full use of the perks, then this card could be a highly lucrative option, even with the £140 fee.